Question: Write a report to management stating why product-line profits differ using activity- based costing compared with the current approach, which uses labor hours to allocate
Write a report to management stating why product-line profits differ using activity- based costing compared with the current approach, which uses labor hours to allocate overhead. Indicate whether activity-based costing provides more accurate information and why (if you believe it does provide more accurate information). Indicate in your 2-3 page report how the use of labor-based overhead allocation could result in management making suboptimal decisions.
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